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Saturday, February 23, 2019

Same Old, Same Old No Longer a Recipe for Modular Industry Success

Nineteen years ago I switched from being a GC to a sales rep for Champion Homes at their Claysburg, PA manufactured home factory. After years of building homes on customer’s land this was a huge change.

Imagine my surprise when I recently saw a video of that factory on YouTube showing that factory with nothing changed in the last two decades. This might be fine for manufactured housing where if the plan isn’t in their plan book they simply don’t build it. It also helps that the Federal HUD code for manufactured has not dramatically changed over the years.

However that is not the case for the modular housing industry that must meet ever changing IRC, Federal, State and Local codes. Changes in how components are built on the production line happen with almost every code change. Profits are all over the place with some factories enjoying better than average bottom line earnings while others are simply trying to hang in there even though they are busy.

Innovation in the modular housing industry is needed but when should it be infused into an assembly line, how will be be received and will it actually produce the results everyone anticipates are just some ot the things holding back modular factory owners and GMs from implementing the.

Regardless of the size of the modular home factory, boosting productivity is essential to enhancing gross profits and maintaining competitiveness. Productivity on the manufacturing floor depends on a combination of efficient employees, equipment and processes.

To begin putting new ideas and innovations in place you must examine your current practices including how each station on the production works, what each employee does and measure existing output levels, create a baseline and implement solutions for measuring change.

The first step is identifying pain points in your current workflow which includes the. people, the current technology and processes required at each station.

Most modular home factories East of the Mississippi use an assembly line to produce their homes while many West of it complete their homes on cribbing and bring all materials to the house while it remains stationary. The efficiencies of the assembly line will only be realized when the the ‘cribbing’ factories begin to see large orders for their homes coming in. But even if a factory chooses to slowly build a more custom modular home on cribbing there is still a lot of innovative ideas that can be installed to improve both throughput and the bottom line.

Identifying the pain points is probably the hardest part of the project. Everywhere you turn you hear people saying “That’s the way we’ve always done it”.

One of the first questions you need to ask is who should begin looking for the pain points and will they actually recognize them when they see them? This is not a silly question. Watch the video and look for the pain points. You could probably watch it a dozen times and not see anything that looks like a pain point. Remember, they’ve been building homes this way for decades and the only thing that changes are the people working on the production line. Efficient or not, it works quite well for them as this is how ‘they’ve always done it’.

Pain points show up throughout the entire modular home process from the moment a customer walks into a builder’s office, through the quoting, ordering, engineering, ordering inventory and how this will effect what happens on the production line.

Everyone thinks the production line is the best place to start looking for those pain or choke points but it actually starts at the very beginning of the process. The assembly line is just the most visible.

Sharing current workflow problems to develop improvement plans for the manufacturing process is not the norm for modular home factory employees, especially the production line laborers. Without a real way for employees to suggest ways to improve their little piece of production line nothing will ever improve and those pain points will continue.

I worked at a factory in PA that had an actual ‘Suggestion Box” where anyone could write a note to the GM. Unfortunately suggestions went in but nothing was ever addressed. Eventually the suggestion box became a garbage can filled with anonymous notes telling the GM and the Owners to go “**** themselves”.

The manufacturing, machining and cutting industries are constantly changing–there’s always a new technology promising to make manufacturing floors more efficient than ever. That is not the case in the modular housing industry especially if the factory has been in business for several decades.

Technological advancements often change the skills required for certain tasks, and workers will require access to regular training to keep up with more advanced specialist skills. By not moving forward with technology many modular home factories have found that this type of training is not necessary.

But builder expectations, pressures regarding production and strict deadlines can contribute to unrealistic goals for the modular factory. When workload benchmarks on the manufacturing floor are unattainable without some compromise to safety or quality, employees become dissatisfied, preventing the company from reaching labor goals.

For many East Coast factories this is already the case as projects of 40, 50 or more modules are put onto the production line while a builder’s home may either be put onto the line mid-project or worse, having it put on the production schedule AFTER the project. If this isn’t a pain point for the builder nothing is.

Modular housing is an industry in which an employee can only be as productive as his or her tools. While innovative machines, such as automated wall machines or CNC mills work well for some housing industries especially the panelized wall, truss and floor manufacturers, they have made few inroads into modular housing.

The number of lost dollars and wasted man-hours that result from a lack of organization can be shocking. Just how shocking is probably not on your radar to learn at this point as you really haven’t begun looking at your factory as a pain generator, only as a money making machine. Eventually you will have to implement changes to maintain existing production levels and margins but for most that time is in the future next to building a colony on Mars.

If you want to begin searching for your factory’s pain points today, first talk to your builders. Listen to their problems working with your factory and don’t immediately react to them in a defensive way. Listen to them talk about their pain points with your factory and put yourself in their shoes. I’m sure you can come up with at least a couple of ways to help them.

Next listen to your sales reps and your engineering people about their pain points.
And finally ask the people on the manufacturing floor where their pain is.

Things work better when everyone works together towards the same goal with as little waste and conflict as possible. While focusing on work is important, it's also crucial to ensure that each staff member feels comfortable as part of a team. The better the members of your team can work together, the more they will encourage a productive workplace culture.

Notice there is not mention of custom modular factories needing to become more automated to survive. Change and innovation can be found in helping relieve people’s pain points throughout the entire process.

4 comments:

Modular plants offer all the advantages of the other off site processes ( Truss; Wall Panels; FIOSS ). Yet it fights itself in delivering on the promise. Some of the pain is caused by the concept itself requiring consistent line production ( hence the appeal of commercial mass produced boxes ) for custom builder orders. Some is caused by factories competing within a finite pool of builders for sales in lieu of finding or developing new business. How many plants are willing to ask and address the issues creating the ONE and DONE experience of a new builder? How many managers ( not just sales managers ) are willing to listen and address concerns and problems from order taking to final service in a constructive way with the builder who left for another plant or left to return to site building ? Worse yet do Owners and Upper Management promote the idea that local GM's or Sales have the authority to act on issues yet actually reverse or limit the authority in practice.

A tall task Gary, very very tall task...Our housing industry ..most certainly.. doesn't lack knowledgeable expert consultants specializing in ..all.. aspect...they are for the most part very well knowns and readily available people ...it just lacks willing pick up the damn phone listeners..ie and then simply ..act on it..that is of course until til the next major housing recession...then of course..sadly thats then too late for most! Been there know that! You nailed it Gary. Bill Hart..

With regards to pain points on the factory floor, I didn't see much emphasis on the labor shortage that is expected to get worse over time. Just look at our kids! There is no doubt that the future labor pool will more readily pick up an iPad to run a CNC mill than an air nailer. This is an unfortunate, but inevitable fact.